Class action suit is filed against PayPal for misapropriating the charity funds donated by consumers

1 March 2017

A first of its kind class action lawsuit is filed with the Federal District Court in Illinois against PayPal and PayPal Giving Fund for failing to disburse money contributed by customers to the intended nonprofit organizations. Edelson PC law firm seeks to sue the payment processing company over a host of violations of the current legislation.

The lawsuit was brought forth to the court on behalf of the customers and a nonprofit organization alleging the fact that many contributions transferred through PayPal Giving Fund to the nonprofit organizations selected by the donors didn’t end up at the intended destination. Furthermore, contributors have no idea where their money actually go to.

According to some stats provided by PayPal last year its Giving Fund processed 7.3 billion US dollars in donations, an 11% increase. The number of contributors amounted to eight million users from 181 countries.

Edelson claims in its filing that consumers are not aware of where their funds are transferred to because PayPal fails to send the donations to the intended nonprofit organizations if the latter have no PayPal account. Which is more, PayPal does not see it fit to even notify such organization of any funds donated to them, so after expiration of six months, the unclaimed funds are transferred to unknown accounts.

One of the suit plaintiffs reported she had made a donation of 3,250 US dollars in December to 13 various charity organizations, and only 100 US dollars of those funds were given to three of them. The remaining amount is at sole ownership of PayPal that has a bone in its arm to move the funds further to the specified recipients.